This document discusses challenges and solutions for ensuring program integrity in LIHEAP (Low Income Home Energy Assistance Program). It notes that risk assessments found issues in some sub-grantees and a GAO report prompted changes to LIHEAP policies. To improve verification, the state will check Social Security numbers, conduct wage matches, authenticate vendors, and encourage post-audits. Operational changes include using a system to electronically verify applicant information without human interaction and expanding an electronic system to allow vendor authentication and benefits verification.

1. LIHEAP PROGRAM INTEGRITY:
CHALLENGES & SOLUTIONS
A K M R A H M A N
M A S S A C H U S E T T S D E P A R T M E N T O F H O U S I N G &
C O M M U N I T Y D E V E L O P M E N T
National Energy and Utility Affordability
Conference (NEUAC) - 2012
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2. Program Background
 Risk-Assessment Assurance of ARRA sub-grantees – 19
out of 24 administer LIHEAP.
 GAO Report and subsequent HHS guidelines –
significant changes in LIHEAP policies and procedures.
 The state Office of Inspector General (OIG) review of all
ARRA-WAP sub-grantees – 15 out of 20 administer
LIHEAP.
 Program Integrity Work Group – MA has been a member
since 2011.
 Service Delivery – changes in LIHEAP application and
certification process.
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3. Program Background
“…to assist low-income households, particularly those with
the lowest incomes, that pay a high proportion of household
income for home energy, primarily in meeting their
immediate home energy needs.”
- High deliverable fuel prices
- Growing caseload
- Funding cuts
- New Program Integrity procedures
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4. The Landscape –
Program Characteristics
Serve over 420,000 individuals or 210,000 households .
About 33% heat with deliverable fuel, 62% utilities, 5%
heat-included in rent.
The average income was $21,000 per household in 2010-
2011.
The LIHEAP Application is designed to collect over 35
different data elements, including SSN.
Non-emergency certification can take up to 4-6 weeks.
Close to 50% of all LIHEAP applications are received by
local agencies before November 1st.
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5. The Landscape –
Flow of LIHEAP and other Funds
State Home
Energy
Programs
(Federal -
$132.67 M
& State -
$21.18 M)
DOE
ARRA-WAP
and regular
WAP
$8.5 million for
LIHEAP
Weatherization
LIHEAP
Sub-
Grantees
(19 CAAs, 1
other non-
profit, 1 city
department)
LIHEAP
Vendors
Regulated
Investor-
Owned Utilities
– 56%
Unregulated
Deliverable
Fuel Vendors -
37%
Regulated
Municipally-
Owned Utilities
- 2%
Heat-
included-
in-Rent
Direct Pay
Clients-
5%.
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6. Policy & Operational Questions
 Is it necessary for a LIHEAP applicant to provide
his/her SSN?
 Should we stop providing benefits to a very small
number of applicants with no SSN?
 We have a vendor contracting process in place, but is
it authentic enough?
 What are the potential “entry points” to LIHEAP
fraud?
 Which changes are reasonable?
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7. Policy & Operational Goals –
Performance Verification System
 Verify SSN and other applicant information.
 Conduct more wage matches.
 Authenticate all LIHEAP vendors.
 Implement “Related-party transactions” and State
Executive Order 504 policies.
 Encourage local agencies to conduct post-audits.
 Develop a formal fraud reporting process.
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8. Operational Changes –
Performance Verification System
 All household members’ SSN and certain available
information will be verified through the SVES IV
system without much human interactions.
 Additional client information will be verified by local
agencies through a TANF data look-up system.
 Dept. of Revenue wage matches are now conducted
at least twice a year. More matches are encouraged.
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9. Operational Changes –
Performance Verification System
 Expanding the State’s E. Gov. system (to allow
vendor authentication, address correction, and
benefit verification).
 Developing new training modules around fraud
prevention and Program Integrity.
 Using data security standards and utilizing new
technology.
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10. Operational Solutions:
Documentation > Verification
Documentation
Identity
Household Composition
Service Address
Household Income
Home Energy
Consumption
Vendor Participation
Tenant-Landlord
No Income Situations
….
SSN, ID, & Birth
Certificates
Proof of Address
Paystubs, Tax Forms,
Award Letter, Checks,
Bank Statements
Electronic Eligibility &
Billing Files
Tenant-Landlord Form
Vendor Contracts
Income Vs. Expense
Calculation
Performance
Verification
More software checks &
balances
SSNs, fixed income, and other
verification
Household composition,
income, TANF benefits, & child
support payment verification
Address correction
Un-duplicate benefit verification
Electronic eligibility & billing
Vendor Authentication
Electronic Wage Match
Post-audits
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11. Operational Solutions:
Secure Data Exchange, Validation, and Fraud Detection
LIHEAP AGENCIES
State E.Gov.
System
(encrypted
data exchange)
SSA
State E.Gov
System
(encrypted
data for
validation and
fraud
detection)
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12. LIHEAP Monitoring Findings:
Fiscal Years 2010 - 2012
0
5
10
15
20
25
30
35
2010 2011 2012
E
r
r
o
r
R
a
t
e
s
(
%
)
Sample 1
Sample 2
Sample 3
Sample 4
Sample 5
Sample 6
Sample 7
Sample 8
N = 22
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13. LIHEAP Program Integrity: Challenges & Solutions
Ongoing Lessons Learned
 Data exchange agreements can take more than a year
to implement.
 Security standards are extremely strict.
 The auditing & oversight community can be helpful.
 Local agencies can help write new business rules.
 Verification should streamline operation.
 Need to set-aside administrative funds.
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14. Contact Information
Akm Rahman
Senior Program Coordinator
Massachusetts Department of Housing
& Community Development
100 Cambridge Street, Suite 300
Boston, MA 02114
(617) 573-1413
www. mass.gov/dhcd
akm.rahman@state.ma.us
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